Excubation: An Alternative Innovation Model

bwcon helps companies with the implementation of innovation projects within the organization

With a variety of specialized high-tech businesses in the area, Baden-Württemberg is one of the leading technology regions in Europe. The fast pace of the internationally networked technology markets in which these companies operate requires them to make existing processes as efficient as possible, and, at the same time, implement revolutionary innovations. This is the only way for such companies to secure their competitiveness in the long term. bwcon, an enterprise in the Steinbeis network, has set up a special interest group (SIG) working on the topic of “Excubation – corporate innovation with autonomous teams.” Its aim: to help companies meet this challenge.

Alternative innovation model

One reason that companies differ in their ability to adapt to the competitive nature of innovation lies in the fact that established technology firms sometimes find it difficult to implement transformational innovation within the company. One of the key challenges they face is how to allocate resources efficiently, given the internal battle for resources between projects that are aimed at preserving the existing business (through exploitation) and those that will shape and establish future business (through exploration), as described by Gilbert and Eyring (2010).

The goal of the Excubation SIG is thus to bolster the competitiveness of technology companies from Baden-Württemberg by providing them with an effective instrument for implementing transformational innovation initiatives. This would involve improving their ability to adapt to strategic challenges, especially when it comes to implementing transformational fields of business in parallel to existing business processes (organizational ambidextrousness). The bwcon experts also recommend effective structures, referring to a technique called “the excubation of semi-autonomous teams of entrepreneurs.” Such structures would improve the efficiency of used resources and reduce risks in the early development phases of transformational innovation initiatives.

The fact that key technology companies in Baden-Württemberg consider it important to bolster competitiveness – and strike a healthy balance between the advantages of an agile startup organization and the resource advantages of established technology firms – is reflected by their involvement in the SIG. Originally set up in the fall of 2013, the companies working with the SIG include SAP, HP, Mahle and Carl Zeiss. This industry consortium is being moderated by Heinrich Siemers, director of innoWerft Technologie- und Gründerzentrum Walldorf Stiftung GmbH, an “incubation” spin-out on the SAP Campus.

At previous workshops, discussion took place between top managers from a selection of technology companies, investors’ representatives and consulting organizations, with the support of the Institute for Strategic Innovation and Technology Management (IST) at Constance University of Applied Sciences. The participants looked at key issues relating to the development of module-based methodologies. These could be used to introduce excubation as an alternative model of innovation along the lines of a requirements analysis. Excubation is being considered as a technique to manage semi-autonomous teams of entrepreneurs. These would be systematically “excubated” from the existing (parent) company into temporary spin-outs. If the strategic fit is good, they could be spun back in to the organization at a later point. This provides technology companies with an effective instrument of organizational restructuring, allowing them to develop transformational business fields. A particular benefit of this model is that companies gain access (at least indirectly) to organizations able to offer them external resources – organizations it would otherwise be uneconomical or inappropriate to approach. At the same time, the approach is less risky, both for the team of entrepreneurs and for the technology company. The model thus makes it possible to improve resource allocation and thus also the financial viability of transformational business fields (Gilbert and Eyring, 2010). The aim of the initiative organized by bwcon is thus to develop appropriate methods and tools.